Gleaming Spires: International students & the PCL lettings market

It’s become less expensive to live and study in London of late, and top agents are reporting a surge in applicants with money to learn…

Recent currency fluctuations have, according to an interesting new survey by Savills and, made London significantly cheaper for international students – at least compared to Stateside counterparts Boston, New York and San Francisco, and for the first time, Sydney, which has now taken fourth place in the world rankings.

On average, it costs over $5,500 a month to live and study in those top three US cities, while a strengthening Aussie dollar has pushed the monthly bills in Sydney up to $4,700, ahead of London’s $4,600.

Competitive doesn’t necessarily mean reasonable, but encouragingly it seems that all our recent political upheaval hasn’t dented the appeal of the UK capital as a place to learn. Which is a good thing on many, many levels: the total student population in London now numbers 2,281,000 (0.7% up on 2015/16), and therefore plays a huge role in the capital’s property market; lettings agency EJ Harris recently estimated a collective rental income contribution of £600m every year.

According to Savills, international students make up 19% of that total population (439,000), with the top countries of origin being China (91,200), Malaysia (17,400) and United States (17,100).

The very wealthiest of international students have been choosing to base themselves in the best parts of London since Roman days (probably), but many new prime and super-prime schemes are now shrewdly targeting this often misunderstood market.

A few months ago, Rhodium’s survey of the super-prime schemes in PCL’s top resi enclaves found 13% of residents were here to study, with most originally hailing from the EU, America and Asia, and residing in London for an average of seven months a year.

Their budgets bring a whole new meaning to the term ‘student digs’”

Susan Cohen, Pastor Real Estate

In arguably the most sought after of those enclaves, Mayfair, luxury agency Wetherell recently estimated that 35% of tenants in the £750-999 pw bracket are students, and 25% in the £1,000-1,999 pw range.

Whatsmore, student activity levels appear to be on the rise. PCL investment firm London Central Portfolio has seen the proportion of students in its rental portfolio more than double in the last ten years, while letting agents have been reporting unusually bumper summers boosted by the annual academic year surge.

Pastor’s Susan Cohen

One such firm, Curzon Street-based Pastor Real Estate, has had young overseas students account for the majority of its deals this year. “75% of our applicants during the past couple of months have been young overseas students,” said Head of Lettings, Susan Cohen. “Their budgets bring a whole new meaning to the term ‘student digs’, with a great number of them having from £1,000 to £2,000 per week to spend.”

According to Cohen, the typical brief involves a central, modern, newly refurbished apartment, located in “safe” locations close to public transport with good local amenities – Mayfair, Knightsbridge, Kensington and Chelsea have been top of the list. Average budgets are usually between £800-£1000 per week for new, well-furnished one-beds, and from £2,000-£2,500 for well-spec’d two-beds. 12-month leases are the norm, and many are paying upfront for the full length of the tenancy “giving peace of mind to both tenant and landlord”.

“Many of our student applicants are studying at London’s best business schools and universities”, Cohen adds, “and a surprising number of them have adequate funds for top of the range properties”.

Over on Sloane Square, Jack Stone of Draker Lettings has seen a similar surge, and offers up an example of the kind of property that’s been flying off the books: “We have recently seen a noticeable increase in international students mainly from Europe, Russia and the Middle East, looking for properties in prime locations and with the financial help of security conscious parents.

“A perfect example of this is a two bedroom apartment in Sloane Square (below), on the market for £1,200 per week, which benefits from a porter, high quality finish throughout and access to Sloane Square underground station and a wide range of local shops, cafes, restaurants and bars.”

Lynsey Schipper of mews specialist Lurot Brand picks up on another trend: “What we are seeing more of is students sharing to reduce the rental cost per head, but enabling them to live in a luxury rental property in a prime location.

“We have just agreed a student let on a house in W2, there are four students sharing and paying a rent of £1,000 per week, paid one year in advance by their parents. This is a fairly typical student let for us, as it offers relatively good value for the tenants on the basis of four sharing.

“Multiple student tenancies in mews houses are generally only acceptable to clients that are extremely keen to let and/or the house is less than perfect and therefore less likely to appeal to the broader market. In this instance, the pay-off for the landlord is in the rent being paid in advance for the duration of the tenancy term, which can be useful if there are future plans to refurbish.”

Meanwhile, down in SW3, Peter Hermon-Taylor of Maskells says the motivation for a top education can often result in a wholesale family move: “Here in Chelsea, we have a tie-in with the Italian HNW community and have housed a number of their family members who are students in London. Most recently, we let a four-bedroom house on Walton Street for two years at £1,500 per week to an Italian family based overseas. The house was let in the mother’s name with her son as a permitted occupier. She will be spending some time at the property – looking after her son as Italian Mamas do, but her son will be the principal occupant. He is studying at King’s for three years. They have a cook, cleaner and driver in the UK all to cater for their son’s needs!

“We see similar scenarios of wealthy European families, especially Italian and French, whose children come to study in London renting within RBKC and looking for well- presented centrally located apartments close to the cafes, cinemas and tubes in Chelsea and Kensington accessible for their various colleges and universities, offering enough space for when their families come to visit.”

“International students make for extremely good tenants… Smoking tends to be the only common vice”

Elizabeth Harris, EJ Harris

But what of the common preconceptions about renting to students? Elizabeth Harris, Managing Director of EJ Harris allays a few fears: “In our experience international students make for extremely good tenants, they are very studious and take their studies in London extremely seriously. As tenants they tend to be quiet, hard working and tidy. Smoking tends to be the only common vice.”

In Pictures: HNW Student Digs

  • Curzon Street

This duplex apartment on Mayfair’s Curzon Street was recently let to a student at £1,550 per week. The newly-kitted-out 998 square foot duplex on the 4th & 5th floors came with air con, underfloor heating and a large private roof terrace.

  • Fountain House, Park Lane

Launched in 2016 and pitched squarely at wealthy students, the six flats in Sir Giles Gilbert Scott’s grandiose Fountain House on Park Lane were redeveloped by Criterion Capital and fully dressed by Alexander James Interior Design, a firm best known for its work on superyachts, grand country houses and top-end London homes.

Measuring between 1,600 and 2,000 square feet, the units all came with highly-specced with mood lighting systems, freestanding baths, dressing rooms and plenty of marble, while the marquee three-bed duplex features a bespoke glass central staircase and some serious entertaining space.

A few have views across Hyde Park and the 1930s building itself provides a grand pillared main entrance foyer with 16 foot high ceilings, manned hotel-style concierge desk, seating areas for arriving guests, 24-hour porter and CCTV security.

Asking prices started at £2,250 per week, with the duplex costing a cool £5,250 (£21,000 per month or £252,000 per year).

  • Mayfair Row

This gated community of four new-build houses in Mayfair was offered up for rent earlier this year, with well-off international students amongst the target market.

Maple Springfield’s Mayfair Row project, just around the corner from Shepherd Market, is one of only three private enclaves in the area and delivered a quartet of turn-key options ranging from 3,310 to 4,289 square feet.

Billed at launch as “the most luxurious letting in Mayfair”, the individually-designed three and four-beds were being pitched at foreign students and families with more than £4,250 per week to splash (that’s £221k per year).

Three of the four houses have a rooftop terrace, accessed via an electrically controlled glass retractable door, with top-end solar panels installed to help keep the bills down. Furnishings are by Celine Estates and the internal spec includes marble staircases, silk carpets, bespoke furniture, Villaverde light fittings, underfloor heating and air con.